Did ministers have warning of police raid? MPs think so

As feverish gossip swirled last night that a Tory frontbencher had been arrested, the rumour mill predicted embarrassment for David Cameron.

Many wondered if the alleged "Treasury mole" long believed to have been feeding documents to George Osborne had been finally caught.

That would have been highly embarrassing to the Opposition since Gordon Brown would have argued powerfully that an economic crisis is no time to leak market sensitive policies.

How extraordinary then that the hand of the law should fall upon the shoulder of the mild figure of Damian Green, regarded as a benign figure by many Labour MPs.

As David Davis argued, Churchill would have been a prisoner in 1940 rather than prime minister if such action had been taken in the Thirties.

In such circumstances, Mr Cameron can argue there was a "whistleblower" rather than a "mole" at work. The difference is not a legal technicality but one of emotional appeal - and it is absolutely crucial.

This is thus dreadfully damaging to the Government - and No10 was trying to shield Mr Brown. But many MPs cannot believe ministers had no advance warning when Mr Cameron, the Commons Speaker and Boris Johnson all knew.

One effect might be to frighten other leakers into hiding. And none is hunted as much as Mr Osborne's suspected source. Ministers think the shadow chancellor was behind accurate reports of the VAT cut and the 45p top band - meant to be budget surprises on Monday but leaked over the weekend.

After this heavy-handed action, the moles will be much more wary in future.